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Ra 10667 Irr

The document outlines rules and regulations to implement the Philippine Competition Act. It defines key terms related to competition such as acquisition, agreement, conduct, dominant position, and relevant market. It identifies prohibited anti-competitive acts such as agreements among competitors to fix prices or divide markets, as well as abuse of dominant position through predatory pricing or imposing unreasonable conditions on customers. The rules are aimed at promoting fair competition in trade, industry and commerce in the Philippines.

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0% found this document useful (0 votes)
98 views13 pages

Ra 10667 Irr

The document outlines rules and regulations to implement the Philippine Competition Act. It defines key terms related to competition such as acquisition, agreement, conduct, dominant position, and relevant market. It identifies prohibited anti-competitive acts such as agreements among competitors to fix prices or divide markets, as well as abuse of dominant position through predatory pricing or imposing unreasonable conditions on customers. The rules are aimed at promoting fair competition in trade, industry and commerce in the Philippines.

Uploaded by

malcolve
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS OF REPUBLIC ACT NO.

10667
(PHILIPPINE COMPETITION ACT)

RULE 1.
TITLE AND SCOPE

SEC. 1. Title. - These rules and regulations shall be referred to as the “Implementing Rules and
Regulations of Republic Act No. 10667” (Rules).

SEC. 2. Scope. –
a) These Rules shall apply to any entity engaged in trade, industry or commerce in the Republic
of the Philippines or in international trade, industry or commerce having direct, substantial and
reasonably foreseeable effects in the Philippines, including those that result from acts done
outside the territory of the Philippines.
b) These Rules shall not apply to the combinations or activities of workers or employees nor to
agreements or arrangements with their employers when such combinations, activities,
agreements, or arrangements are designed solely to facilitate collective bargaining in respect
of conditions of employment.

RULE 2.
DEFINITION OF TERMS

The following definition of terms shall apply for purposes of these Rules:
a) “Acquisition” refers to the purchase or transfer of securities or assets, through contract or other
means, for the purpose of obtaining control by:
1) One (1) entity of the whole or part of another;
2) Two (2) or more entities over another; or
3) One (1) or more entities over one (1) or more entities;
b) “Agreement” refers to any type or form of contract, arrangement, understanding, collective
recommendation, or concerted action, whether formal or informal, explicit or tacit, written, or
oral;
c) “Conduct” refers to any type or form of undertaking, collective recommendation, independent
or concerted action or practice, whether formal or informal;
d) “Commission” refers to the Philippine Competition Commission created under the Act;
e) “Confidential business information” refers to information, which concerns or relates to the
operations, production, sales, shipments, purchases, transfers, identification of customers,
inventories, or amount or source of any income, profits, losses, expenditures, which are not
generally known to the public or to other persons who can obtain economic value from its
disclosure or use, or is liable to cause serious harm to the person who provided it, or from
whom it originates, and is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy;
f) “Control” refers to the ability to substantially influence or direct the actions or decisions of an
entity, whether by contract, agency or otherwise;
g) “Dominant position” refers to a position of economic strength that an entity or entities hold
which makes it capable of controlling the relevant market independently from any or a
combination of the following: competitors, customers, suppliers, or consumers;
h) “Entity” refers to any person, natural or juridical, sole proprietorship, partnership, combination
or association in any form, whether incorporated or not, domestic or foreign, including those
owned or controlled by the government, engaged directly or indirectly in any economic activity;
i) “Joint venture” refers to a business arrangement whereby an entity or group of entities
contribute capital, services, assets, or a combination of any or all of the foregoing, to undertake
an investment activity or a specific project, where each entity shall have the right to direct and
govern the policies in connection therewith, with the intention to share both profits and risks
and losses subject to agreement by the entities;
j) “Market” refers to the group of goods or services that are sufficiently interchangeable or
substitutable and the object of competition, and the geographic area where said goods or
services are offered;
k) “Merger” refers to the joining of two (2) or more entities into an existing entity or to form a new
entity, including joint ventures;
l) “Relevant market” refers to the market in which a particular good or service is sold and which
is a combination of the relevant product market and the relevant geographic market, defined
as follows:
1) A relevant product market comprises all those goods and/or services which are
regarded as interchangeable or substitutable by the consumer or the customer, by
reason of the goods and/or services’ characteristics, their prices, and their intended
use; and
2) the relevant geographic market comprises the area in which the entity concerned is
involved in the supply and demand of goods and services, in which the conditions of
competition are sufficiently homogenous and which can be distinguished from
neighboring areas because the conditions of competition are different in those area;
m) “Ultimate parent entity” is the juridical entity that, directly or indirectly, controls a party to the
transaction, and is not controlled by any other entity .

RULE 3.
PROHIBITED ACTS

SEC. 1. Anti-Competitive Agreements. -


a) The following agreements, between or among competitors, are per se prohibited:
1) Restricting competition as to price, or components thereof, or other terms of trade;
2) Fixing the price at an auction or in any form of bidding, including cover bidding, bid
suppression, bid rotation and market allocation, and other analogous practices of bid
manipulation.
b) The following agreements, between or among competitors, which have the object or effect of
substantially preventing, restricting, or lessening competition shall be prohibited:
1) Setting, limiting, or controlling production, markets, technical development, or
investment;
2) Dividing or sharing the market, whether by volume of sales or purchases, territory, type
of goods or services, buyers or sellers, or any other means.
c) Agreements other than those specified in (a) and (b) of this Section, which have the object or
effect of substantially preventing, restricting, or lessening competition shall also be prohibited.
Provided, that those which contribute to improving the production or distribution of goods and
services or to promoting technical or economic progress, while allowing consumers a fair share
of the resulting benefits, may not necessarily be deemed a violation of the Act.
d) For purposes of this Section, entities that control, are controlled by, or are under common
control with another entity or entities, have common economic interests, and are not otherwise
able to decide or act independently of each other, shall not be considered competitors.

SEC. 2. Abuse of Dominant Position. –


a) It shall be prohibited for one or more entities to abuse their dominant position by engaging in
conduct that would substantially prevent, restrict, or lessen competition, including:
1) Selling goods or services below cost with the object of driving competition out of the
relevant market. Provided, that in the Commission’s evaluation of this fact, it shall
consider whether such entity or entities had no such object and that the price
established was in good faith to meet or compete with the lower price of a competitor
in the same market selling the same or comparable product or service of like quality.
2) Imposing barriers to entry or committing acts that prevent competitors from growing
within the market in an anti-competitive manner, except those that develop in the
market as a result of or arising from a superior product or process, business acumen,
or legal rights or laws;
3) Making a transaction subject to acceptance by the other parties of other obligations
which, by their nature or according to commercial usage, have no connection with the
transaction;
4) Setting prices or other terms or conditions that discriminate unreasonably between
customers or sellers of the same goods or services, where such customers or sellers
are contemporaneously trading on similar terms and conditions, where the effect may
be to lessen competition substantially; Provided, that the following shall be considered
permissible price differentials:
i. Socialized pricing for the less fortunate sector of the economy;
ii. Price differentials which reasonably or approximately reflect differences in the
cost of manufacture, sale, or delivery resulting from differing methods,
technical conditions, or quantities in which the goods or services are sold or
delivered to the buyers or sellers;
iii. Price differential or terms of sale offered in response to the competitive price
of payments, services, or changes in the facilities furnished by a competitor;
and
iv. Price changes in response to changing market conditions, marketability of
goods or services, or volume.
5) Imposing restrictions on the lease or contract for sale or trade of goods or services
concerning where, to whom, or in what forms goods or services may be sold or traded,
such as:
i. fixing prices, or
ii. giving preferential discounts or rebate upon such price, or
iii. imposing conditions not to deal with competing entities,

where the object or effect of the restrictions is to prevent, restrict or lessen competition
substantially: Provided, that nothing contained in the Act shall prohibit or render
unlawful:
i. Permissible franchising, licensing, exclusive merchandising, or exclusive
distributorship agreements, such as those which give each party the right to
unilaterally terminate the agreement, unless found by the Commission to have
substantial anti-competitive effect;
ii. Agreements protecting intellectual property rights, confidential information, or
trade secrets;
6) Making supply of particular goods or services dependent upon the purchase of other
goods or services from the supplier which have no direct connection with the main
goods or services to be supplied;
7) Directly or indirectly imposing unfairly low purchase prices for the goods or services of,
among others, marginalized agricultural producers, fisherfolk, micro-, small-, medium-
scaled enterprises, and other marginalized service providers and producers;
8) Directly or indirectly imposing unfair purchase or selling price on their competitors,
customers, suppliers, or consumers, Provided that prices that develop in the market
as a result of or due to a superior product or process, business acumen or legal rights
or laws shall not be considered unfair prices; and
9) Limiting production, markets, or technical development to the prejudice of consumers,
Provided, that limitations that develop in the market as a result of or due to a superior
product or process, business acumen, or legal rights or laws shall not be a violation of
this Act.
b) Nothing in the Act or these Rules shall be construed or interpreted as a prohibition on having
a dominant position in a relevant market, or on acquiring, maintaining, and increasing market
share through legitimate means that do not substantially prevent, restrict, or lessen competition.
c) Any conduct which contributes to improving production or distribution of goods or services
within the relevant market, or promoting technical and economic progress, while allowing
consumers a fair share of the resulting benefit may not necessarily be considered an abuse of
dominant position.
d) The foregoing shall not constrain the Commission or the relevant regulator from pursuing
measures that would promote fair competition or more competition as provided in the Act.

SEC. 3. Determination of exceptions. - In SEC. 2, par. (a) (2), (8) and (9), the concerned entity or
entities invoking the exception shall clearly establish to the Commission’s satisfaction, that the barrier
to entry or anti-competitive act is an indispensable and natural result of the superior product or process,
business acumen, or legal rights or laws.

RULE 4.
MERGERS AND ACQUISITIONS

SEC. 1. Review of mergers and acquisitions. -The Commission, motu proprio or upon notification
as provided under these Rules, shall have the power to review mergers and acquisitions having a
direct, substantial and reasonably foreseeable effect on trade, industry, or commerce in the Philippines,
based on factors deemed relevant by the Commission.
a) In conducting this review, the Commission shall:
1) Assess whether a proposed merger or acquisition is likely to substantially prevent,
restrict, or lessen competition in the relevant market or in the market for goods and
services as may be determined by the Commission; and
2) Take into account any substantiated efficiencies put forward by the parties to the
proposed merger or acquisition, which are likely to arise from the transaction.
b) In evaluating the competitive effects of a merger or acquisition, the Commission shall endeavor
to compare the competitive conditions that would likely result from the merger or acquisition
with the conditions that would likely have prevailed without the merger or acquisition.
c) In its evaluation, the Commission may consider, on a case-to-case basis, the broad range of
possible factual contexts and the specific competitive effects that may arise in different
transactions, such as:
1) the structure of the relevant markets concerned;
2) the market position of the entities concerned;
3) the actual or potential competition from entities within or outside of the relevant market;
4) the alternatives available to suppliers and users, and their access to supplies or
markets;
5) any legal or other barriers to entry.

SEC. 2. Notifying entities. –


a) Parties to a merger or acquisition that satisfy the thresholds in Sec. 3 of this Rule are required
to notify the Commission before the execution of the definitive agreements relating to the
transaction.
b) If notice to the Commission is required for a merger or acquisition, then all acquiring and
acquired pre-acquisition ultimate parent entities or any entity authorized by the ultimate parent
entity to file notification on its behalf must each submit a Notification Form (the “Form”) and
comply with the procedure set forth in Sec. 5 of this Rule. The parties shall not consummate
the transaction before the expiration of the relevant periods provided in this Rule.
c) In the formation of a joint venture (other than in connection with a merger or consolidation),
the contributing entities shall be deemed acquiring entities, and the joint venture shall be
deemed the acquired entity.

SEC. 3. Thresholds for compulsory notification. - Parties to a merger or acquisition are required to
provide notification when:
a) The aggregate annual gross revenues in, into or from the Philippines, or value of the assets in
the Philippines of the ultimate parent entity of at least one of the acquiring or acquired entities,
including that of all entities that the ultimate parent entity controls, directly or indirectly, exceeds
One Billion Pesos (PhP1,000,000,000.00);

and

b) The value of the transaction exceeds One Billion Pesos (PhP1,000,000,000.00), as


determined in subsections (1), (2), (3) or (4), as the case may be.
1) With respect to a proposed merger or acquisition of assets in the Philippines if either
i. the aggregate value of the assets in the Philippines being acquired in the
proposed transaction exceeds One Billion Pesos (PhP1,000,000,000.00); or
ii. the gross revenues generated in the Philippines by assets acquired in the
Philippines exceed One Billion Pesos (PhP1,000,000,000.00).
2) With respect to a proposed merger or acquisition of assets outside the Philippines, if
i. the aggregate value of the assets in the Philippines of the acquiring entity
exceeds One Billion Pesos (PhP1,000,000,000.00); and
ii. the gross revenues generated in or into the Philippines by those assets
acquired outside the Philippines exceed One Billion Pesos
(PhP1,000,000,000.00).
3) With respect to a proposed merger or acquisition of assets inside and outside the
Philippines, if
i. the aggregate value of the assets in the Philippines of the acquiring entity
exceeds One Billion Pesos (PhP1,000,000,000.00); and
ii. the aggregate gross revenues generated in or into the Philippines by assets
acquired in the Philippines and any assets acquired outside the Philippines
collectively exceed One Billion Pesos (PhP1,000,000,000.00).
4) With respect to a proposed acquisition of (i) voting shares of a corporation or of (ii) an
interest in a non-corporate entity
i. If the aggregate value of the assets in the Philippines that are owned by the
corporation or non-corporate entity or by entities it controls, other than assets
that are shares of any of those corporations, exceed One Billion Pesos
(PhP1,000,000,000.00); or
ii. The gross revenues from sales in, into, or from the Philippines of the
corporation or non-corporate entity or by entities it controls, other than assets
that are shares of any of those corporations, exceed One Billion Pesos
(PhP1,000,000,000.00);

and

iii. If
(a) as a result of the proposed acquisition of the voting shares of a
corporation, the entity or entities acquiring the shares, together with
their affiliates, would own voting shares of the corporation that, in the
aggregate, carry more than the following percentages of the votes
attached to all the corporation’s outstanding voting shares:
(1) Thirty-five percent (35%), or
(2) Fifty percent (50%), if the entity or entities already own more
than the percentage set out in subsection I above, as the case
may be, before the proposed acquisition;

Or

(b) as a result of the proposed acquisition of an interest in a non-corporate


entity, the entity or entities acquiring the interest, together with their
affiliates, would hold an aggregate interest in the non-corporate entity
that entitles the entity or entities to receive more than the following
percentages of the profits of the non- corporate entity or assets of that
non-corporate entity on its dissolution:
(1) Thirty-five percent (35%), or
(2) Fifty percent (50%), if the entity or entities acquiring the interest
are already entitled to receive more than the percentage set
out in subsection I immediately above before the proposed
acquisition.
c) Where an entity has already exceeded the 35% threshold for an acquisition of voting shares,
or the 35% threshold for an acquisition of an interest in a non-corporate entity, another
notification will be required if the same entity will exceed 50% threshold after making a further
acquisition of either voting shares or an interest in a non-corporate entity.
d) In a notifiable joint venture transaction, an acquiring entity shall be subject to the notification
requirements if either:
1) the aggregate value of the assets that will be combined in the Philippines or contributed
into the proposed joint venture exceeds One Billion Pesos (PhP1,000,000,000.00); or
2) the gross revenues generated in the Philippines by assets to be combined in the
Philippines or contributed into the proposed joint venture exceed One Billion Pesos
(PhP1,000,000,000.00). In determining the assets of the joint venture, the following
shall be included:
i. All assets which any entity contributing to the formation of the joint venture
has agreed to transfer, or for which agreements have been secured for the
joint venture to obtain at any time, whether or not such entity is subject to the
requirements of the act; and
ii. Any amount of credit or any obligations of the joint venture which any entity
contributing to the formation has agreed to extend or guarantee, at any time.
e) A merger or acquisition consisting of successive transactions, or acquisition of parts of one or
more entities, which shall take place within a one-year period between the same parties, or
any entity they control or are controlled by or are under common control with another entity or
entities, shall be treated as one transaction. If a binding preliminary agreement provides for
such successive transactions or acquisition of parts, the entities shall provide notification on
the basis of such preliminary agreement. If there is no binding preliminary agreement,
notification shall be made when the parties execute the agreement relating to the last
transaction which, when taken together with the preceding transactions, satisfies the
thresholds under this Section.
f) For purposes of calculating notification thresholds:
1) The aggregate value of assets in the Philippines shall be as stated on the last regularly
prepared balance sheet or the most recent audited financial statements in which those
assets are accounted for.
2) The gross revenues from sales of an entity shall be the amount stated on the last
regularly prepared annual statement of income and expense of that entity.
g) A transaction that meets the thresholds and does not comply with the notification requirements
and waiting periods set out in Sec. 5 shall be considered void and will subject the parties to an
administrative fine of one percent (1%) to five percent (5%) of the value of the transaction.
h) In the case of a merger or acquisition of banks, banking institutions, building and loan
associations, trust companies, insurance companies, public utilities, educational institutions,
and other special corporations governed by special laws, a favorable or no-objection ruling by
the Commission shall not be construed as dispensing with the requirement for a favorable
recommendation by the appropriate government agency under Sec. 79 of the Corporation
Code of the Philippines.
i) A favorable recommendation by a governmental agency with a competition mandate shall give
rise to a disputable presumption that the proposed merger or acquisition is not violative of the
Act or these Rules, Provided, that the recommendation must arise directly from the exercise
of the agency’s mandate to determine any anti-competitive effect of the proposed merger or
acquisition.

SEC. 4. Consultations preceding the submission of notification. –

1. (a) Prior to filing a notification pursuant to this Rule, parties to a proposed merger or acquisition
that are required to notify may inform the Commission of their proposed merger or acquisition
and request a pre- notification consultation with the staff of the Commission.
To request a meeting, the parties must provide the following information in writing:
1. (1) the names and business contact information of the entities concerned;
2. (2) the type of transaction; and
3. (3) the markets covered or lines of businesses by the proposed merger or acquisition.
2. (b) During such pre-notification consultations, the parties may seek non- binding advice on
the specific information that is required to be in the notification.
SEC. 5. Procedure for notification and review.
a) Each party to a merger or acquisition required to give notification to the Commission shall
submit the Notification Form and pay such applicable fees as may be determined by the
Commission. An electronic copy of the Form and a scanned copy of the certification referred
to in subparagraph (b) of this Section, contained in a secure electronic storage device, shall
likewise be submitted to the Commission, simultaneous with the filing of the aforementioned
hard copy.
b) The Form must be signed by a general partner of a partnership, an officer or director of a
corporation, or in the case of a natural person, the natural person or his/her legal
representative, and certified that the contents of the Form are true and accurate of their own
personal knowledge and/or based on authentic records. In all cases, the certifying individual
must possess actual authority to make the certification on behalf of the entity filing the
notification.
c) The parties may notify, on the basis of a binding preliminary agreement in any form, such as
a memorandum of agreement, term sheet, or letter of intent. Each of the acquired and
acquiring entities must submit an affidavit with their Forms, attesting to the fact that a binding
preliminary agreement has been executed and that each party has an intention of completing
the proposed transaction in good faith.
d) Both the certification and the affidavit must be notarized or otherwise authenticated.
e) Except as described below, the waiting period begins after all notifying entities have filed their
respective Forms, together with the corresponding certifications and affidavits, and have been
notified by the Commission that the Forms are complete.
1) In voting securities acquisitions, such as tender offers, third party and open market
transactions, in which the acquiring entity proposes to buy voting securities from
shareholders of the acquired entity, rather than from the entity itself:
i. the acquiring entity is required to serve notice on the issuer of those shares to
ensure the acquired entity is aware of its reporting obligation;
ii. only the acquiring entity must submit an affidavit. The acquiring entity must
state in the affidavit that it has an intention of completing the proposed
transaction in good faith, and that it has served notice on the acquired entity
as to its potential reporting obligations (and in tender offers, the acquiring entity
also must affirm that the intention to make the tender offer has been publicly
announced); and
iii. the waiting period begins after the acquiring entity files a complete Form.
f) Upon submission of the Form, the Commission shall determine within fifteen (15) days whether
the Form and other relevant requirements have been completed in accordance with applicable
rules or guidelines, and shall inform the parties of other information and/or documents it may
have failed to supply, or issue a notice to the parties that the notification is sufficient for
purposes of commencing Phase I review of the merger or acquisition.
g) The waiting period under this Section shall commence only upon the Commission’s
determination that the notification has been completed in accordance with applicable rules and
guidelines.
h) Within thirty (30) days from commencing Phase I review, the Commission shall, if necessary,
inform the parties of the need for a more comprehensive and detailed analysis of the merger
or acquisition under a Phase II review, and request other information and/or documents that
are relevant to its review.
i) The issuance of the request under the immediately preceding paragraph has the effect of
extending the period within which the agreement may not be consummated for an additional
sixty (60) days. The additional sixty (60) day period shall begin on the day after the request for
information is received by the parties; Provided, that, in no case shall the total period for review
by the Commission of the subject agreement exceed ninety (90) days from the time the initial
notification by the parties is deemed complete as provided under paragraph (f) of this Section;
Provided further, that should the parties fail to provide the requested information within fifteen
(15) days from receipt of the said request, the notification shall be deemed expired and the
parties must refile their notification. Alternatively, should the parties wish to submit the
requested information beyond the fifteen (15) day period, the parties may request for an
extension of time within which to comply with the request for additional information, in which
case, the period for review shall be correspondingly extended.
j) Parties to a proposed transaction under review shall inform the Commission of any substantial
modifications to the transaction. On the basis of the information provided, the Commission
shall determine if a new notification is required.
k) Where notification of a transaction is not required, then the periods provided above for the
Commission to conclude its review shall not apply.
l) The Commission, in its discretion, may terminate a waiting period prior to its expiration.
m) When either waiting period set out ends on a Saturday, Sunday or holiday, the waiting period
is extended until the next business day.
n) When the above periods have expired and no decision has been promulgated for whatever
reason, the merger or acquisition shall be deemed approved and the parties may proceed to
implement or consummate it.
o) All notices, documents, and information provided to or emanating from the Commission under
Sec. 4 and 5 of this Rule shall be subject to the confidentiality rule under Sec. 34 of the Act
and Sec. 13 of this Rule, except for the purpose of enforcing the Act or these Rules, or when
the release of information contained therein is with the consent of the notifying entity or is
mandatorily required to be disclosed by law or by a valid order of a court of competent
jurisdiction, or of a government or regulatory agency, including an exchange.

SEC. 6. Effect of notification. - If within the relevant periods stipulated in the preceding section, the
Commission determines that the merger or acquisition agreement is prohibited under Sec. 20 of the
Act and Sec. 9 of this Rule, and does not qualify for exemption under Sec. 21 of the Act and Sec. 10
of this Rule, the Commission may:
a) Prohibit the implementation of the agreement;
b) Prohibit the implementation of the agreement unless and until it is modified by changes
specified by the Commission; or
c) Prohibit the implementation of the agreement unless and until the pertinent party or parties
enter into legally enforceable agreements specified by the Commission.

SEC. 7. Publication of notification summary. –


a) When additional information or documents requested by the Commission for the purpose of a
Phase II review of a notified merger or acquisition has been submitted by the parties, the
Commission shall publish on its website the following information related to the notification on
the basis of the Form submitted by the parties:
1) the name of the involved entities;
2) the type of the transaction;
3) the markets covered or lines of businesses by the proposed merger or acquisition; and
4) the date when the complete notification was received.
b) When publishing this information, the Commission shall take into account the legitimate
interest of the entities regarding the protection of their trade secrets and other confidential
information.

SEC. 8. Modifications to thresholds on compulsory notification. - The Commission shall publish,


from time to time, regulations adopting, modifying, rescinding or otherwise changing:
a) The transaction value threshold and such other criteria subject to compulsory notification;
b) The information that must be supplied for notified mergers or acquisitions; Exceptions or
exemptions from the notification requirement; and
c) Other rules relating to the notification procedures.

SEC. 9. Prohibited mergers and acquisitions. - Merger or acquisition agreements that substantially
prevent, restrict, or lessen competition in the Philippines in the relevant market or in the market for
goods or services, as may be determined by the Commission, shall be prohibited.

SEC. 10. Exemptions from prohibited mergers and acquisitions. - Merger or acquisition
agreements prohibited under Sec. 20 of the Act and Sec. 9 of this Rule may, nonetheless, be exempt
from prohibition by the Commission when the parties establish either of the following:
a) The concentration has brought about or is likely to bring about gains in efficiencies that are
greater than the effects of any limitation on competition that result or are likely to result from
the merger or acquisition agreement; or
b) A party to the merger or acquisition agreement is faced with actual or imminent financial failure,
and the agreement represents the least anti- competitive arrangement among the known
alternative uses for the failing entity’s assets.
Provided, that an entity shall not be prohibited from continuing to own and hold the stock or other share
capital or assets of another corporation, which it acquired prior to the approval of the Act, or from
acquiring or maintaining its market share in a relevant market through such means without violating
the provisions of the Act and these Rules;

Provided, further, that the acquisition of the stock or other share capital of one or more corporations
solely for investment and not used for voting or exercising control and not to otherwise bring about, or
attempt to bring about the prevention, restriction or lessening of competition in the relevant market
shall not be prohibited.

SEC. 11. Burden of proof. - The burden of proof under Sec. 10 of this Rule lies with the parties
seeking the exemption. A party seeking to rely on the exemption specified in Sec. 21(a) of the Act or
Sec. 10(a) of this Rule must demonstrate that if the agreement were not implemented, significant
efficiency gains would not be realized.

SEC. 12. Finality of rulings on mergers and acquisitions. - Merger or acquisition agreements that
have received a favorable ruling from the Commission, except when such ruling was obtained on the
basis of fraud or false material information, may not be challenged under the Act or these Rules.

SEC. 13. Treatment of confidential information. –


a) Information, including documents, shall not be communicated or made accessible by the
Commission, insofar as it contains trade secrets or other confidential information, the
disclosure of which is not considered necessary by the Commission for the purpose of the
review.
b) Any entity or party that supplies information, including documents, to the Commission, shall
clearly identify any material that it considers to be confidential, provide a justification for the
request of confidential treatment of the information supplied and the time period within which
confidentiality is requested, and provide a separate non-confidential version by the date set by
the Commission.
c) The Commission may require the parties to the merger or acquisition and other interested
parties to identify any part of a decision or case summary adopted by the Commission, if any,
which in their view contains trade secrets or other confidential information. Where trade secrets
or other confidential information are identified, the parties to the merger or acquisition and
other interested parties shall provide a justification for the request of confidential treatment and
provide a separate non-confidential version by the date set by the Commission.
d) Whenever the Commission, pursuant to Sec. 13(c) of this Rule, deems that the justification for
confidential treatment provided by the party is insufficient or not grounded, it shall inform the
interested party of its decision to make the information accessible.
e) If a merger or acquisition is under review in multiple jurisdictions, parties to the transaction
may waive the confidentiality protections contained in this Rule, so as to allow the Commission
to exchange otherwise protected information with competition authorities in other countries.
RULE 5.
DETERMINATION OF THE RELEVANT MARKET

SEC. 1. - For purposes of determining the relevant market, the following factors, among others,
affecting the substitutability among goods or services constituting such market, and the geographic
area delineating the boundaries of the market shall be considered:
a) The possibilities of substituting the goods or services in question with others of domestic or
foreign origin, considering the technological possibilities, the extent to which substitutes are
available to consumers and the time required for such substitution;
b) The cost of distribution of the good or service, its raw materials, its supplements and
substitutes from other areas and abroad, considering freight, insurance, import duties, and
non-tariff restrictions; the restrictions imposed by economic agents or by their associations;
and the time required to supply the market from those areas;
c) The cost and probability of users or consumers seeking other markets; and
d) National, local or international restrictions which limit the access by users or consumers to
alternate sources of supply or the access of suppliers to alternate consumers.

RULE 6.
DETERMINATION OF CONTROL

SEC. 1. What constitutes control of an entity. - Control refers to the ability to substantially influence
or direct the actions or decisions of an entity, whether by contract, agency or otherwise.

In determining the control of an entity, the Commission may consider the following:
a) Control is presumed to exist when the parent owns directly or indirectly, through subsidiaries,
more than one half (1/2) of the voting power of an entity, unless in exceptional circumstances,
it can clearly be demonstrated that such ownership does not constitute control.
b) Control also exists even when an entity owns one half (1/2) or less of the voting power of
another entity when:
1) There is power over more than one half (1/2) of the voting rights by virtue of an
agreement with investors;
2) There is power to direct or govern the financial and operating policies of the entity
under a statute or agreement;
3) There is power to appoint or remove the majority of the members of the board of
directors or equivalent governing body;
4) There is power to cast the majority votes at meetings of the board of directors or
equivalent governing body;
5) There exists ownership over or the right to use all or a significant part of the assets of
the entity; or
6) There exist rights or contracts which confer decisive influence on the decisions of the
entity.

RULE 7.
DETERMINATION OF ANTI-COMPETITIVE AGREEMENT OR CONDUCT

SEC. 1. Determination of an anti-competitive agreement or conduct. - In determining whether an


anti-competitive agreement or conduct substantially prevents, restricts, or lessens competition, the
Commission, in appropriate cases, shall, inter alia:
a) Define the relevant market allegedly affected by the anti-competitive agreement or conduct,
following the principles laid out in Sec. 24 of the Act and Rule 5 of these Rules;
b) Determine if there is actual or potential adverse impact on competition in the relevant market
caused by the alleged agreement or conduct, and if such impact is substantial and outweighs
the actual or potential efficiency gains that result from the agreement or conduct;
c) Adopt a broad and forward-looking perspective, recognizing future market developments, any
overriding need to make the goods or services available to consumers, the requirements of
large investments in infrastructure, the requirements of law, and the need of our economy to
respond to international competition, but also taking account of past behavior of the parties
involved and prevailing market conditions;
d) Balance the need to ensure that competition is not prevented or substantially restricted and
the risk that competition efficiency, productivity, innovation, or development of priority areas or
industries in the general interest of the country may be deterred by overzealous or undue
intervention; and
e) Assess the totality of evidence on whether it is more likely than not that the entity has engaged
in anti-competitive agreement or conduct, including whether the entity’s conduct was done with
a reasonable commercial purpose, such as but not limited to, phasing out of a product or
closure of a business, or as a reasonable commercial response to the market entry or conduct
of a competitor.

RULE 8.
DETERMINATION OF DOMINANCE

SEC. 1. Existence of dominance. - Dominance can exist on the part of one entity (single dominance)
or of two or more entities (collective dominance).

SEC. 2. Assessment of dominance. - In determining whether an entity has a market dominant


position for purposes of this Act and these Rules, the Commission shall consider the following
illustrative and non-exhaustive criteria, as may be appropriate:
a) The share of the entity in the relevant market and the ability of the entity to fix prices unilaterally
or to restrict supply in the relevant market;
b) The share of other market participants in the relevant market;
c) The existence of barriers to entry and the elements which could foreseeably alter both the said
barriers and the supply from competitors;
d) The existence and power of its competitors;
e) The credible threat of future expansion by its actual competitors or entry by potential
competitors (expansion and entry);
f) Market exit of actual competitors;
g) The bargaining strength of its customers (countervailing power);
h) The possibility of access by its competitors or other entities to its sources of inputs;
i) The power of its customers to switch to other goods or services;
j) Its recent conduct;
k) Its ownership, possession or control of infrastructure which are not easily duplicated;
l) Its technological advantages or superiority, compared to other competitors;
m) It’s easy or privileged access to capital markets or financial resources;
n) Its economies of scale and of scope;
o) Its vertical integration; and
p) The existence of a highly developed distribution and sales network.

SEC. 3. Presumption of dominance. - There shall be a rebuttable presumption of market dominant


position if the market share of an entity in the relevant market is at least fifty percent (50%), unless a
new market share threshold is determined by the Commission for that particular sector.

SEC. 4. Setting the thresholds for dominance. - The Commission shall, from time to time, determine
and publish the threshold for dominant position or the minimum level of share in the relevant market
that could give rise to a presumption of dominant position. In such a determination, the Commission
would consider:
a) The structure of the relevant market;
b) The degree of integration;
c) Access to end-users;
d) Technology and financial resources; and
e) Other factors affecting the control of a market, as provided in Sec. 2 of this Rule.
SEC. 5. Exceptions. - The Commission shall not consider the acquisition, maintenance and increase
of market share through legitimate means that does not substantially prevent, restrict, or lessen
competition in the market, such as but not limited to, having superior skills, rendering superior service,
producing or distributing quality products, having business acumen, and enjoying the use of protected
intellectual property rights as violative of the Act and these Rules, Provided, that the concerned entity
or entities invoking the exception shall clearly establish to the Commission’s satisfaction, that the
barrier to entry or anti-competitive act is an indispensable and natural result of the superior product or
process, business acumen, or legal rights or laws.

RULE 9.
FORBEARANCE

SEC. 1. Forbearance of the Commission. - The Commission, motu proprio or upon application, prior
to its initiation of an inquiry, may forbear from applying the provisions of the Act or these Rules, for a
limited time, in whole or in part, in all or specific cases, on an entity or group of entities, if in its
determination:
a) Enforcement is not necessary to the attainment of the policy objectives of this Act;
b) Forbearance will neither impede competition in the market where the entity or group of entities
seeking exemption operates nor in related markets;
c) Forbearance is consistent with public interest and the benefit and welfare of the consumers;
and
d) Forbearance is justified in economic terms;

Provided, that forbearance will be granted for a maximum period of one year. Any extension to the
period will have to be expressly approved by the Commission. Any extension of the duration of an
exemption shall not be longer than one year.

SEC. 2. Public hearing. –


a) A public hearing shall be held to assist the Commission in making its determination under Sec.
1 of this Rule.
b) The Commission’s order exempting the relevant entity, or group of entities under this Rule
shall be made public. Conditions may be attached to the forbearance if the Commission deems
it appropriate to ensure the long-term interests of consumers.
c) In the event that the basis for the issuance of the exemption order ceases to be valid, the order
may be withdrawn by the Commission.

RULE 10.
FINAL PROVISIONS

SEC. 1. Revisions of these Rules. - The Commission may revise these Rules whenever it deems
necessary and after due consultation with affected stakeholders.

SEC. 2. Separability clause. -Should any provision herein be subsequently declared unconstitutional,
the same shall not affect the validity or legality of the other provisions.

SEC. 3. Effectivity. -These Rules shall take effect fifteen (15) days after the date of its publication in
at least two (2) newspapers of general circulation.

Approved: May 31, 2016

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